News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Bearish
Oil - US Crude
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Mixed
Gold
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Bearish
USD/JPY
Bullish
More View more
Real Time News
  • 🇲🇽 Economic Activity YoY (JUL) Actual: -9.8% Expected: -10% Previous: -13.3% https://www.dailyfx.com/economic-calendar#2020-09-25
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.79%, while traders in EUR/GBP are at opposite extremes with 65.81%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/pPMQB3Sgtf
  • Heads Up:🇲🇽 Economic Activity YoY (JUL) due at 11:00 GMT (15min) Expected: -10% Previous: -13.2% https://www.dailyfx.com/economic-calendar#2020-09-25
  • Norges Bank - total liquidity has been unevenly distributed between banks, leading to considerable uncertainty over supply of NOK. Adds that they will offer fully allotted F-Loans at fixed rates with 1 day maturities
  • London put on national Covid watch list amid recent surge in cases
  • Commodities Update: As of 10:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: -0.29% Gold: -0.42% Silver: -1.13% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/OTTxCl6GJR
  • Spanish health minister says the government recommends a total lockdown in Madrid
  • Forex Update: As of 10:00, these are your best and worst performers based on the London trading schedule: 🇳🇿NZD: 0.18% 🇦🇺AUD: 0.02% 🇯🇵JPY: -0.05% 🇨🇭CHF: -0.11% 🇪🇺EUR: -0.22% 🇬🇧GBP: -0.25% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/37yFAZ530P
  • There is a great debate about which type of analysis is better for a trader. Is it better to be a fundamental trader or a technical trader? Find out here:https://t.co/7kPzAoNoLG https://t.co/Fa4sDLIjww
  • 🇫🇷 Unemployment Benefit Claims (AUG) Actual: -171K Previous: -172.2K https://www.dailyfx.com/economic-calendar#2020-09-25
BoE Strikes a Cautious Tone on Global Growth Concerns

BoE Strikes a Cautious Tone on Global Growth Concerns

2015-10-09 23:51:00
James Stanley, Strategist
Share:
BoE Strikes a Cautious Tone on Global Growth ConcernsBoE Strikes a Cautious Tone on Global Growth Concerns

Fundamental Forecast for British Pound:Neutral

The British Pound continues to trade with a mean-reversion tendency as prognostications around future rate hikes are becoming even more complex given the headwinds being seen by the global economy. We heard quite a bit about these headwinds at the most recent Bank of England rate decision, as the bank, once again, voted 8-1 to keep rates unchanged. The lone dissenter was, again, Mr. Ian McCafferty who had even voted to hike rates five times between August 2014 to December 2014; when there were no signs whatsoever of inflation within the British economy. At this point, we can safely label Mr. McCafferty a ‘hawk,’ but he’s outnumbered by a cautious Central Bank that wants to evaluate the economic situation on a global scale before kicking rates higher. The last rate hike from the Bank of England was in July of 2007 when the bank moved rates up to 5.75% before tempering them back down later in the year, beginning a cycle of low (and lower) rates that has yet to stop.

The head of the Bank, Mr. Mark Carney, called the current state of the global economy a ‘pretty unforgiving environment.’ Mr. Carney also went on to say that the timing of the BoE’s first move will not be dependent on the Federal Reserve as many have come to expect, and despite continued signs of recovery after upbeat British growth in the first half of the year slowed in the 3rd quarter, the bank’s rate decision should come ‘into sharper focus’ around the end of the year.

After seeing recent clues of inflationary pressure, primarily from wage growth, expectations for a BoE rate hike had begun creeping higher over the past two months. But as the circling troubles of China (and Asia), Emerging Markets and Commodity prices have thrown a wrench into global growth plans, expectations for inflation (and rate hikes) have been moving accordingly lower. Markets are now not pricing in a quarter-point rate hike until all the way out to 2017; and the Bank of England is expecting inflation to remain below one percent until spring of 2016, so there really isn’t any hurry to hike.

The Monetary Policy Committee will publish new inflation forecasts next month and this could provide direction for the Sterling should the bank push their expectation for a return to 2% inflation back to August of 2017. While this could equate to Sterling weakness, GBP/USD has to contend with a US Dollar that’s seeing a dramatic drop after the FOMC minutes showed another cautious Central Bank on the other side of the Atlantic.

The forecast for the Pound remains neutral for now, until a more defined fundamental direction can develop as the world grapples with slowing growth and a lackluster economy a full six years after the financial collapse. The UK and the BoE are one of the few spots other than the US that might be looking at higher rates in the not-too-distant future; but should matters change and should growth continue slowing, those expectations for higher rates will likely diminish and these currencies (both GBP and USD) could face massive weakness as rate-hike bets price out of the market.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES